| C.A.R. Opposes Transfer Tax Bills! Contact Your Senator Today! C.A.R. OPPOSES two pieces of proposed legislation because they are, in fact, taxes and should be subject to approval by local voters, not the legislature. Both bills will be voted on in the state Senate soon. C.A.R. OPPOSES AB 827 (Yamada), which allows counties to impose an additional "fee" of $3 on the recording of every real estate-related document to fund the archiving of historical documents (e.g. county board of supervisors meeting minutes). C.A.R. OPPOSES AB 827 because it is not a "fee" but rather a tax on the transfer of property. C.A.R. also opposes AB 985 (De La Torre) which will set up an expensive program to eliminate ancient illegal and unenforceable racial restrictions from the public record of property ownership, even though they are of no legal effect. The bill will surcharge every recorded document an additional $3 to fund a program to process requests to eliminate what is already illegal and unenforceable language. It will allow any person to submit a correction to property records to remove an illegal restriction. C.A.R. OPPOSES because it too is a tax disguised as a fee. AB 985 will generate about $60,000,000 during its first three years of operation, far in excess of actual costs, even though there are only a miniscule number of record correction requests. If these two bills were enacted, along with a 3rd legitimate recording fee, the cost of recording will increase by $9 for every document and by $12 for every real estate-related document. Action Item Please call Senator Joe Simitian at 1-800-961-3302 And enter your PIN number -- 198002023 Ask your Senator to vote NO on AB 827 and AB 985 Issue Background California law states that a fee must be related to the cost of providing the service for which the fee is collected. If the fee collected is not related to the service provided, it is a tax and therefore must be approved by the voters. It is a transfer tax because it burdens recordings and must be paid to transfer property. AB 827 allows counties to collect up to an additional $3 for the recording of a real estate document, on top of other existing recording fees. Counties will then be allowed to use the proceeds from the additional "fees" to pay for the archiving of historical documents, including those from local agency meetings, records pertaining to transportation or "other records of public or historical" interest. Again, since the charge doesn't directly pay for the RECORDING of documents, it is a TRANSFER TAX, and under existing law must be approved by the voters. In the case of AB 985, county recorders are using computer scanning now to search for, and expunge, social security numbers from records and C.A.R. has sought to have the same mechanism applied to illegal restrictions. The author has refused. C.A.R. has continued to oppose the bill because it does not utilize modern data processing methods to search for illegal restrictions and is a disguised tax. Over the last three years only about two dozen correction requests have been received statewide. AB 985 will encourage local government to overcharge for a correction program and use these funds for other programs. The $60 million the bill will raise in the first three years far exceeds the costs of actually correcting the property records in question. Again, since the fee collected does not directly pay for the RECORDING of documents, it is a TRANSFER TAX, and under existing law must be approved by the voters. Talking Points These are TRANSER TAXES -- NOT FEES! State law specifically limits the amount collected for a fee to the cost of the actual service, in this case the recording of documents. By earmarking the funds collected through these "fees" for the ARCHIVING of county documents of historical interest and CORRECTING title records, AB 827 and AB 985 allow counties to impose new taxes on the transfer of real property. Those who benefit from the archiving should pay for it. Counties should simply charge those who use the archives, thus making this charge a legitimate fee. Counties should use existing and less costly technology to correct outdated title records. Both bills attempt to make an end-run around voters. State law requires that new local taxes must be approved by voters. The sponsors of AB 827 and AB 985 are hoping to avoid this "hurdle." For More Information Please contact DeAnn Kerr at deannk@car.org or Christopher Carlisle at christopherc@car.org if you have questions or need further information. If you need assistance with your PIN number, please contact C.A.R. at 916-492-5200. | 
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